<article><section><p>Energy Analysis: Judith Aldersey-Williams, partner at CMS, discusses what the combination of the coronavirus (COVID-19) pandemic and the recent crash in oil price means for the North Sea oil and gas industry.</p></section></article><section><p><em>The North Sea oil and gas industry is currently facing a ‘perfect storm’ of coronavirus and an oil price crash. The combination of which is placing incredible strain on the industry. The share prices of quoted oil companies and oil service companies have fallen significantly—operators have reported plans to cut operating costs and reduce their capital expenditure by up to a third, and supermajors have halted share buyback schemes. BP’s Bernard Looney has said that ‘this may be the most brutal environment for oil and gas businesses in decades’.</em></p><section><h2><mark id="CITEID_818369"></mark>Practical impacts of coronavirus (COVID-19)</h2><p>The most immediate challenge for the UK oil and gas industry is that of coronavirus and the associated government restrictions. The oil and gas sector is considered an essential service as the government needs to ensure continued security of supply; the UK’s oil and gas industry still provides 45% of UK total energy needs, and 59% of its oil and gas demand.</p><p>Whilst companies have sent their head office workers home, key workers remain offshore, at terminals and in warehouses and logistics facilities. Onshore sites are presently not mandated to close but must carry out an individual risk assessment to confirm whether work can continue in the circumstances, bearing in mind the application of health and safety requirements and the obligation to ensure a safe working environment for employees. Arrangements are also in place to assist the continued travel of key workers to and from heliports—an Oil & Gas UK (OGUK) template travel letter, that can be carried by key workers and shown to police if challenged, has been made available across the industry. The industry is also monitoring the impact on supply of equipment due to border closures and restrictions on port operations and is engaging with the police to try </p></section></section>
Source: LexisNexis Purpose Built
Coronavirus (COVID-19)—impact on North Sea oil and gas industry
